3 ways to assist customers who can’t pay on time

Unless your utility is an anomaly, each month you have customers who, for a variety of reasons, can’t pay their bill on time.

But, before we get to that, here are the results of last issue’s poll regarding a loose coin policy:


Payment Plans

The usual scenarios for customers having difficulty paying their bill range from wanting to extend their due date a few additional days to requesting a payment plan for repaying a very large bill over time.


Let’s look at the three most common forms of payment plans utilities offer customers for additional time to pay their bills.


Extensions are generally used to give customers a few additional days to pay after the due date. Some utilities will defer the late fee when granting an extension, but most use extensions to delay the cut-off process. Some utilities will still assess the cut-off fee (or whatever you call it), but not terminate service, while others will waive the fee provided the extension is paid on time.

Most utilities limit the number of extensions a customer may have in a given period of time (for example two in any year) and some will only grant extensions to customers with a good payment history. The results of the 2012 Utility Fee Survey revealed one utility charges a $5.00 payment extension fee.

Installment Service

Installment services allow you to divide a large outstanding balance into manageable amounts which are billed each month as part of the utility bill. This requires temporarily adjusting the outstanding balance off the account. As each monthly installment is billed, the outstanding balance is gradually added back to the account until it is fully repaid.

With an installment service, the account still qualifies for the cut-off list if the total bill, including regular monthly charges and the installment amount, is not paid on time.

If your billing software supports installment services, the service will be automatically deactivated once the final monthly installment is billed. Should the customer close the account prior to all of the installments being billed, the outstanding balance will be added to their final bill.

Payment Arrangements

Payment arrangements differ from installment services in that they are used when a customer wants to make multiple, prescheduled payments between billings rather than a single payment due with each bill.

Payment arrangements are a little more work to manage than installment services, but they provide your customers with more flexibility. If your billing software supports payment arrangements, it should allow you to schedule each promised payment date and amount. If your customer misses a scheduled payment, the software should detect this and notify you so you can take whatever action your policy dictates.

Are you offering payment plans?

If your utility doesn’t offer payment plans, or if the way you administer them seems awkward and time consuming, please give me a call at 919-232-2320 or email me at gsanders@logicssolutions.com for more information about how a business review could help improve your operation.

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© 2016 Gary Sanders

What is your policy regarding loose coins?

You’ve probably read articles online or seen television news accounts of irate customers protesting a bill by paying entirely with coins. If you haven’t, just Google “coins as payment protest”. There’s even this story about a Michigan woman paying her entire $569.81 adjusted water bill with coins!

Listserv inquiry

A post from earlier this summer in a listserv I follow inquired if others in the listserv had policies prohibiting customers from paying with an excessive amount of coins. Apparently the poster has experienced this problem, or is at least interested in not experiencing it in the future!

Are you prepared to keep it from happening?

In an earlier Utility Information Pipeline, I wrote about a utility that doesn’t accept cash at all, so for them this wouldn’t be an issue. However, if your utility is like most I’m familiar with, you still accept cash and, without a policy to stop it, could be susceptible to an angry customer trying to pay with all coins.

Most banks won’t accept an excessive amount of coins for deposit unless they are rolled. So requiring any payment in coins (in excess of the amount of a roll of that denomination) to be rolled does not seem unreasonable. Also, entirely reasonable in my opinion, would be a limit to how much in rolled coins can be tendered for a single transaction.

How do you handle loose coins?

How does your utility deal with loose coins? Please take this quick poll.


Once you’ve taken the poll, you can see the results to see how other utilities responded. If you have a loose coins policy, please feel free to post the specifics of your policy in the comments. Click here to see the results.

Are your payment policies up-to-date?

If your payment policies are outdated, or if you think you could improve on how you take payments, please give me a call at 919-232-2320 or email me at gsanders@logicssolutions.com for more information about how a business review could help improve your operation.

Click here to subscribe to my free, bi-weekly email newsletter...

© 2016 Gary Sanders